Introduction:-

The insurance industry of India consists of 53 insurance companies of which 24 are

in life insurance business and 29 are non-life insurers. Among the life insurers, Life
Insurance Corporation (LIC) is the sole public sector company. Apart from that,
among the non-life insurers there are six public sector insurers. In addition to these,
there is sole national re-insurer, namely, General Insurance Corporation of India
(GIC Re). Other stakeholders in Indian Insurance market include agents (individual
and corporate), brokers, surveyors and third party administrators servicing health
insurance claims.

Out of 29 non-life insurance companies, five private sector insurers are registered to
underwrite policies exclusively in health, personal accident and travel insurance
segments. They are Star Health and Allied Insurance Company Ltd, Apollo Munich
Health Insurance Company Ltd, Max Bupa Health Insurance Company Ltd, Religare
Health Insurance Company Ltd and Cigna TTK Health Insurance Company Ltd. There
are two more specialised insurers belonging to public sector, namely, Export Credit
Guarantee Corporation of India for Credit Insurance and Agriculture Insurance
Company Ltd for crop insurance.

Every individual is a personality which is defined by the set of traits which he has
acquired through conscious or unconscious exposure to various environment.
Identification of these traits & selecting a business opportunity which is in prefect
unison with the personality is most crucial job for a person. But in the present
scenario the opportunities in the ever growing Insurance sector are available in
abundance.
Before the passage of IRDA Bill 1999, there were two nationalized companies in the
insurance business (i.e.) Life Insurance Corporation of India and General Insurance
Corporation of India. General Insurance Corporation of India has four subsidiaries to
carry on general insurance business. They are The New India Assurance Co. Ltd.,
National Insurance Co. Ltd., United India Insurance Co. Ltd. and The Oriental
Insurance Co. Ltd.
These companies together have 6300 offices through out the length and breadth of
the country. These companies have 10 lacs indirect employees (agents) and 2 lacs
direct employees. These 12 lacs employees conduct insurance business of Rs.
42,000 crores annually and cover just 6% of the insurable population.
Looking Ahead

Already 25 companies have been granted insurance license by Insurance Regulatory

and Development Authority (IRDA). When we look at the profile of these companies
and their foreign partners, they are financially very strong, have deep pockets and
would deploy highly advanced technology in the field of insurance, which has never
been witnessed by the Indian Insurance Consumers, be it IT technology, be it
Customer Service, be it innovative Products etc. It is projected that another 20 will
enter the insurance sector in next 10 years. The insurance business is projected to
grow to 6 lacs crores as per Confederation of Indian Industry (CII) report. The
manpower required to generate insurance business of 6 lac crores is projected to be
40 lacs. Till date, Insurance companies in India have concentrated their efforts to
sell insurance in urban areas mainly. Very little premium comes from the rural areas.
Seeing that Insurers prefer easy and cost effective selling and with the
apprehension that new players will also follow the same strategy, Insurance
Regulatory and Development Authority (IRDA) has made it mandatory for insurance
companies to do minimum fixed percentage of total insurance business in Rural
area as well. This is to ensure that benefit of privatization of insurance is passed on
to the masses in real sense. Over 70% of population lives in the Rural India and this
is the segment, which is yet to be accessed. A number of the new entrants shall be
targeting this area and for this they shall be needing a trained and well-motivated
workforce to effectively market their products, a challenge for next 3 years. Even in
the urban area as the existing companies already have a very strong foothold it will
not be easy for the new entrants to make a dent in the business of these companies
unless aggressive marketing of their products is done. The real test of course will be
their service performance at every stage, as MODULE - 1 Business Environment
Notes 19 Business Opportunities in Insurance Sector DIPLOMA IN INSURANCE
SERVICES worldwide also it is the strength of limited few Insurance companies and
weakness of many. It is this benchmark, which will ensure the acceptability of the
company by the Public at large. The traditional mindset of the Indian people does
not view Insurance as a very desirable product and it is viewed with suspicion as the
general feeling is that Insurance companies collect the premiums but do not pay up
when claims arise or if they do pay its only after a lot of harassment. To overcome
this mental block is not going to be easy and the new companies will have to go in
for innovative marketing methods.

New Avenues

Auto-insurers are shifting toward Usage-Based Insurance

Auto-insurers are shifting toward Usage-Based Insurance, which will help them to
enhance their claim handling capabilities and enable them to perform better
customer segmentation Background Usage-Based Insurance (UBI) implements the

concept of writing the premium for auto-insurance based on usage and/or driving
behavior Vehicle telematics (in-car installed devices to transmit data in real time)
is widely used to estimate the usage of a car, including driving pattern and driving
behavior Key Drivers Rapid growth of smartphone capabilities including GPS,
accelerometers, and g-force tracking, which can enable mobile apps to replace
telematic devices Increased ownership of connected cars with built-in embedded
telematics systems Vehicle theft detection systems and other value-added
services can be integrated with the telematics system, which aims to increase
customer safety

Increasing Demand for Cyber Insurance

As more businesses want to protect themselves from unforeseen cyber attacks, the
demand for cyber insurance is increasing and it is expected that cyber insurance
may become a default choice for many companies Background Though companies
have an information security division and several best practices to prevent cyber
crime, it is impossible to ensure complete protection from cyber crimes: This is
due to non-availability of sound technical solutions, vulnerable security products,
problems in implementing security solutions, and human errors Key Drivers Since
complete elimination of cyber risk is not possible, the second best option for
businesses is to transfer the cyber risk for a premium Some insurance companies
provide value-added services, which can help businesses prevent/handle a cyber
attack Trend Overview Cyber risk has been termed as a potential global threat by
the World Economic Forum: The global financial impact of cyber crime is estimated
to be around $575 billion7 The increase in cyber threats are the prime reason for
the current need of cyber insurance: Though cyber insurance has been available
for over ten years, it was not widely adopted due to lack of data, lack of awareness
among users and legal hurdles Most of the cyber insurance premium volumes
cover the U.S. and the adoption in other parts of the globe is relatively low The
various damages that are covered under cyber insurance are intellectual property
theft, business interruption, data and software loss, cyber extortion, cyber crime/
cyber fraud, breach of privacy event, network failure liability, impact on reputation,
and physical asset damage 7 Cyber Risk Insurance Market Outlook With AIG, ACE
Ltd, Chubb Corp., Zurich Insurance Co. Ltd, Marsh and Beazley Group Ltd., PR
Newswi
Emergence of Peer-to-Peer Insurance
Peer-to-peer insurance is an emerging concept, which can provide insurance at low
cost. If this model is widely adopted, established insurance firms will face tough
competition Background The peer-to-peer insurance business model teams up
individuals who agree to pool their insurance premiums, with losses compensated
using the pooled money. The left-over money is again divided among the individuals

 The peer-to-peer concept is an emerging concept with very few players in the
insurance industry in the U.S., U.K. and Europe Key Drivers If the cost of insurance
is reduced, many uninsured people will buy an insurance policy Customers want
speedy claims processing Trend Overview The peer-to-peer insurance model is
expected to gather widespread adoption in emerging as well as mature markets:
In emerging markets, the reduced premium cost will be an incentive for adopting
the peer-to-peer insurance model In mature markets, good Internet connectivity
and commoditized insurance product lines will be key drivers to adopt the peer-topeer insurance model In peer-to-peer insurance, the cost of insurance is reduced
by the following ways: It is expected that there will be a drop in fraud because
everyone is connected socially and it can reduce the premium paid by the
policyholder Policyholders will use their private information to decide whom to
connect with, rejecting bad risk profiles There can be a reduction in process costs
because the small risks will be handled using the networks payback The cost of
sales for the business model can be reduced because of its ability to onboard new
customers through the customers network The administration cost will also
decline because of the expected reduction in the number of sales agents and better
risk profiles